The chairman of the company running Dunedin's troubled
Forsyth Barr Stadium, Sir John Hansen, has been forced to
defend ''optimistic'' predictions of profit, as the company
eyes a possible six-figure drop in revenue next year.
Dunedin Mayor Dave Cull yesterday confirmed the council was
concerned by the potential for a drop in revenue at the
stadium totalling ''several hundred thousand dollars'' in
That was because of the scheduling of a midwinter All Blacks
rugby test at the stadium, earlier than expected, leaving the
venue without a major income-earner booked for 2014-15, he
The drop in expected revenue, as well as concerns about the
fundamental flaws in the stadium operation, had prompted last
week's announcement of a review by council chief executive Dr
Sue Bidrose, he said.
However, with updated budget details not due to be presented
to the council until next month, continuing uncertainty was
also part of the problem, he said.
''That's the concern but because we don't have any certainty,
we don't know ... we are talking about hundreds of thousands
of dollars when we don't get a major event.''
Sir John, contacted yesterday, would not confirm the size of
the likely losses expected until after the budget details
were reviewed at a board meeting on Friday.
He would only say the small profit projected for the
2014-15 year would now ''no longer be the case''.
''It would be wrong of me to put figures on it before the
board meeting, but it is quite clear that the following year
will be a very challenging one.''
However, he defended a rosier assessment of the company's
financial performance, given in October last year, which
suggested the stadium had turned a financial corner.
At the time, DVML's then-chief executive, Darren Burden, said
prospects for better financial results were looking
''reasonably good'', after DVML turned a $3.21 million loss
in 2011-12 into a $986,000 loss in 2012-13.
The company's statement of intent predicted a $98,000 loss
for 2013-14, followed by a small profit of $10,000 in
''It would be foolhardy of me to paint the ultimate positive
picture, but what I can say is we've got some confidence now
that everything is heading in the right direction,'' Mr
Burden said at the time.
Asked about the comments yesterday, Sir John said they were
not misleading ''at all''.
''Obviously, that's what Darren thought, that we were heading
in the right direction. I would put it differently. I would
put it that they were improving, but the fundamental flaws in
the model remain,'' Sir John said.
Part of the problem was the announcement in December - after
Mr Burden's comments - that the stadium would host an All
Blacks versus England rugby test on June 14, Sir John said.
That was earlier than expected, as it had been assumed the
stadium would host a test later in 2014, placing profits from
the event in the 2014-15 year, he said.
DVML had cut costs by 10%, while improving revenues by 23%,
in 2012-13, but Sir John said ''fundamental difficulties''
They included using $4 million of DVML's revenue to help
cover stadium debt, as well as continuing difficulties
attracting large concerts, he said.
''Things were improving ... but the fundamental difficulties
remained. I just think the city, with a new CEO, have decided
we need to address those fundamental difficulties, and I'm
all in favour of that.''
Mr Cull said the earlier comments had proven to be ''very
optimistic'', but that was with the benefit of hindsight.
Dr Bidrose said she was yet to receive final budget figures
from DVML, and referred questions about the figures to Sir
She expected the updated figures would be presented to the
council next month, in time to be included in the council's
2014-15 budget process.